Post #1

How To Prepare for a Potential Financial Emergency

It was March 14th, 2020 at approximately 11pm in the evening when my world was officially shut down. My husband Amos and I were performing at a wedding about an hour outside of Austin, TX. Pre-COVID, every Saturday for the last three years (10+ years for him) has been spent performing at somebody's wedding. It is our joy and our honor to do what we love for a living and help people celebrate big occasions such as this. I personally perform an average of 300 times per year, and the company that we run together books seven figures worth of private event entertainment annually.

On our first band break that night, we received word that events in Austin would be limited to 500 people or less. I could see my bandmates getting nervous, but I was supposed to be a leader. I had to remain positive and keep it together. "500 people? Psh. Maybe we'll lose a few corporate parties, but we will be totally fine. Don't worry." "Don't worry" became my slogan of the next 5 hours. On the second band break, somehow the number of people allowed at events had already shrunk again. 250 people or less. "Guys, look around you! This wedding is maybe 175 people TOPS. We are going to be fine. Don't worry." Halfway through the last set - 100 people or less. "Okay so maybe our weddings in the next two weeks will need to pivot. No big deal, everybody. Don't worry." I was saying the words out loud but felt like I was talking to myself. 11pm - 15 people or less. Well crap. Everyone began to panic. Despite my newfound and short-lived slogan, I could feel it happening - I was worrying.

The next few months were an uphill battle as we watched the world of politicians and medical professionals and everyone's mom's second cousin flail in a sea of information that nobody seemed to be able to verify. We spent sunrise to sunset on the phone with clients and venues and vendors trying to predict the future, and we all saw it in differing and conflicting ways. All in all, we moved or cancelled over 180 weddings and events - not counting all of the events that never even had a chance to book. It was heartbreaking for us and for the 60+ contract musicians and sound techs we provided income to every week prior to the disaster.

This story is important because it is a tiny microscopic example of what was happening (and is still happening) all over the country - all over the world. An emergency. It is a unique example in that millions and millions of us are going through almost the exact same emergency at the exact same time. Maybe you are reading this from your comfy work-from-home tech start-up job in your PJs thinking, "That didn't happen to me. That wouldn't happen to me." You might be right in that this particular scenario is not happening or going to happen to you, but you WILL encounter emergencies of your own. I.e. someone hits your car in the parking lot and drives away, your beloved dog needs expensive surgery, you need expensive surgery, a flood destroys your home, you get injured and are unable to work for a long period of time, your company eliminates your department and you're unexpectedly out of a job. Emergencies happen. And back to the original example that many of us are living in now - how prepared or not prepared we are for emergencies separates who survives (financially) and who does not. We are lucky to be financial survivors of this pandemic, but it's not just luck. Our financial preparedness was no accident.

Here are two basic ways to start preparing for a potential financial emergency -

1. Get out of debt. Debt is a negative on your net-worth/assets. Debt comes with monthly payments. Monthly payments drain your bank account. Carrying debt will not only prevent you from building wealth, it will also put you in a world of trouble when an emergency comes along. You don't want to have to choose between making your $550/month fancy car payment and taking your 4-year-old to the ER to get stitches. It is equal parts hilarious and frustrating to me that the moment everyone is in a financial crisis, the banks and government and other financial institutions try to incentivize you to get into MORE debt by offering lower interest rates. Do not fall for this trap. Paying interest is essentially burning money. You wouldn't take $500 and burn it in your backyard, would you? Then stop going into debt!

2. Set up a savings account with 3-6 months of expenses. Trust me, as someone who loves the instant gratification of spending money on something I want, this one was hard for me, too. "You mean just leave $15,000-30,000 just sitting there?!" Yes. That's exactly what I mean. That is your EMERGENCY money. Guess what it's for? An emergency! When your 6-year-old breaks their collarbone trying to fly off the bunk bed, when your car engine completely dies on you, when your favorite Aunt Elizabeth passes away suddenly and she happens to live in London and you need to buy a last minute international plane ticket to go to the funeral. You. Will. Have. The. Money. Just like that, an emergency became an inconvenience. You can focus all of your attention on the things that really need it - getting your kid to the best hospital ASAP, calling an uber to get to work on time, emotional grieving and mourning your favorite Aunt Beth. Money will be the last thing on your mind, as it should be. And should you suddenly find yourself out of work like the 40+million Americans who were jobless with zero notice, you will have plenty of money to live on for several months so you can find the right action plan for you and your family with a clear head and with patience. Without panic. We are human, so there will still be worries. But you won't have to. Because even though you never wanted to be in this position, you were prepared.

More to come on how to get out of debt and also how to calculate your monthly budget so you know exactly how much should be in your emergency fund. Thanks for reading, and stay tuned!